What to Include in a Job Estimate: A Checklist for Contractors
A clear estimate answers the customer's questions before they ask them. It shows who you are, what you will do, what it costs and what could change the price. Here is what to put in every job estimate, in the order a customer reads it.
This checklist works for plumbers, electricians, handymen, painters, landscapers and general contractors. The same rules apply whether you write estimates on paper, in a spreadsheet or in an app.
1. Your business details
Put your business name, phone number, email address and business address at the top. Add your logo if you have one. The customer should know who sent the estimate and how to reach you without searching for it.
Many states and cities require a license for contracting, electrical and plumbing work, and some require the license number on estimates, bids or contracts. Make sure you hold every license your work needs before you offer it. Your state's contractor licensing board can tell you what applies to your trade.
2. The customer and the project
Include the customer's name, the job site address and a short project title, such as "Kitchen faucet replacement" or "Panel upgrade, 200 amp." Add the date you wrote the estimate and an estimate number so both of you can refer to it later.
3. A clear scope of work
The scope says what the job includes. Write it in plain words the customer understands. Be specific: "Replace 40-gallon gas water heater, including haul-away of the old unit" is better than "Water heater work."
Just as important is what the job does not include. Common exclusions are permit fees, drywall repair after access, painting, or work on anything found behind walls. A short list of exclusions prevents most "I thought that was included" arguments.
4. Itemized line items
Break the price into lines. Each line should have:
- A description of the work or material
- A quantity, such as 16 or 2.5
- A billing unit, such as hour, day, each, square foot, linear foot or flat rate
- A unit price
- A line total (quantity × unit price)
Use the same units every time. If you bill labor by the hour on one estimate and by the day on the next, customers find it harder to compare, and so do you.
| Description | Qty | Unit | Unit price | Amount |
|---|---|---|---|---|
| Labor: remove and replace vanity | 6 | hour | $85.00 | $510.00 |
| Vanity faucet (customer-selected model) | 1 | each | $165.00 | $165.00 |
| Supply lines and fittings | 1 | set | $38.00 | $38.00 |
| Haul-away and disposal | 1 | flat rate | $75.00 | $75.00 |
Figures are illustrative only, not suggested prices.
5. Subtotal, discount, sales tax and total
After the lines, show the subtotal, any discount, sales tax and the final total. Show the tax as its own line so the customer can see it.
Sales tax rules for labor and materials differ from state to state and by type of work. Some states tax materials but not labor. Others tax certain services too. Check with your state's department of revenue or your accountant before you set a rate.
6. How long the price is good for
Material prices and your schedule change. A "valid until" date tells the customer how long you will hold the price. After that date, you can review the estimate before you agree to the work.
7. Terms and assumptions
An estimate is an approximation, not a promise that the price can never change. Say so in plain words, and say what would change it. For example:
This estimate is based on the scope and information provided. Final pricing may change if the scope, site conditions, or material selections change. Please review all line items before approving.
Also list your payment terms: when payment is due and which payment methods you accept. If you ask for a deposit, check your state's rules first. Some states limit the deposit a home-improvement contractor can collect before work starts.
Not sure if you need an estimate or a quote? See Estimate vs. quote: what's the difference?
8. A clear way to say yes
Make it easy for the customer to approve. That can be a signature line on paper, or an approve button on a web page. Keep in mind that a simple approval may not be enough on its own. In many states, home-improvement work above a certain amount needs a written contract with specific terms. If your job needs one, use it in addition to the estimate.
Also check cancellation rules. When a customer agrees to buy at their home, federal and state rules may give them a right to cancel. For example, the FTC's Cooling-Off Rule gives buyers until midnight of the third business day to cancel certain sales of $25 or more made at their home, and requires the seller to give written notice of that right. Exceptions apply, and many states have their own home-solicitation and home-improvement rules.
Quick checklist
- Business name, phone, email, address and logo
- License number, if your state or city requires it
- Customer name, job address, project title, date and estimate number
- Scope of work, with exclusions
- Line items with description, quantity, unit, unit price and amount
- Subtotal, discount, sales tax and total
- A valid-until date
- Terms: what can change the price, payment terms, deposit
- A clear way to approve, plus a written contract where required
- Any required notices, such as a right to cancel
How to write estimates like this faster
Most of this checklist is the same on every job. Your business details, units and terms rarely change. Only the scope and the line items do.
DraftForth is an iPhone app built around that. You save your business profile and logo once, and they appear on every estimate. You describe the job out loud or type it, and DraftForth creates an editable draft with line items, quantities, billing units and prices. You review and correct every line, add a discount, a sales tax rate and a Valid Until date, then send it as a link or a PDF. DraftForth does not check your estimates for legally required content, such as license numbers or cancellation notices. That part is up to you. For the step-by-step version, read how to create and send an estimate from your iPhone.
This article is general information for small businesses. It is not legal, tax or accounting advice. Rules on licensing, contracts, deposits, cancellation rights and sales tax vary by state and city. Check with your state licensing board, a tax professional or a lawyer for your situation.